Private equity’s key figures slide into the red

The Australian Private Equity & Venture Capital Association has released its Deal Metrics Survey for 2012, which examines private equity deal activity for the year to June 30, 2012. Most of the key indicators – including the number of deals, enterprise value of deals, pricing of deals and the exit environment – are declining amid economic uncertainty and jittery markets.

Here are some of the key findings and graphics:

■ The number of new private equity (PE) transactions has slumped to its lowest level in seven years amid economic uncertainty and most of completed transactions were defensive, involving assets with performance track records and growth prospects.

■ Examining the number of new PE deals by band of enterprise value, the survey showed most deals were focused on the small and medium end of the market:

AFR
AFR

■ The quarterly moving annual total (MAT) of enterprise value shows deal value in financial year 2012 declined in the later stages of the year as the euro zone debt crisis unfolded:

■ The pricing multiples (EV/EBITDA) for new deals declined from 8.3 times last year to 6.8 times in FY12, the lowest level for seven years. Economic uncertainty had reduced bidding competition and exerted downward pressure on prices, the survey said, while also noting good multiples were available for strong assets with promising growth trajectories:

■ On fund-raising and exits, most respondents said the environment was more challenging in FY12, and the survey said limited partners were becoming more selective about who they fund, and they were spending large amounts of time to find buyers in this climate:

The report also contains key data on venture capital. The full report can be viewed here.